Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 112.534 | EURUSD 1.14681 | AUDUSD 0.78278 | NZDUSD 0.73478 | USDCAD 1.2650 | USDCHF 0.96359 | GBPUSD 1.31022 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.14750 | 1.1457

USDJPY                 112.689 | 112.40

GBPUSD               1.31132 | 1.30917

AUDUSD              0.78285 | 0.78087

USDCHF               0.96479 | 0.96319

USDCAD               1.26626 | 1.26399

NZDUSD               0.73604 | 0.7317

EURGBP               0.87548 | 0.87457

EURCHF                1.10555 | 1.10509

EURJPY                 129.153 | 128.964

For today

• EUR: Opening unchanged from Friday the market initially pushed into the Bank holiday Tokyo session testing the 1.1475 areas before slowly drifting back to hold around the 1.1460 levels through to the grey hour, Topside offers through the 1.1480 levels and likely to continue strongly into the 1.1500 areas with possible options in play on a move through the level, a push through the levels is likely to see weak stops and possibly larger stops joining in for a quick move higher however, the 1.1560 level will likely see some weak offers appearing and the market again slowing as it pushes through the 1.1570 areas with good offers likely into the 1.1600 areas. Downside bids light through to the 1.1400 level with a break back below the 1.1380 areas likely to see weak stops coming into play and the market making a quick move through to the 1.1300 areas with bids yet to build sufficiently in that 1.1400 area.
• GBP: A very quiet session for the Cable with the market holding the opening levels for much of the session with only limited rises to the 1.3110 areas before returning to trade around the 1.3100 area through to the grey hour, Topside offers is all sentimental with 1.3150 lightly offered and stronger offers appearing into the 1.3200 areas, with limited congestion from Jly-Oct16 period the market has the potential to rise through to the 1.3400 areas in time however, that’s in time and in a normal market away from the she will he will attitude of the negotiators on Brexit. Downside bids light through to the 1.3050 level with weak stops likely to appear quickly through the level and leaving the 1.3000 vulnerable, with some bids likely to be forming in the area the market and will likely quickly get cleared out on the first push and opening the market back to the 1.2905 areas.
• JPY: No Tokyo today saw the market move around the 112.50 levels before moving off the lows around 112.40 to push towards the 112.70 levels in quiet trading, the market eventually settled into a very quiet range around the 112.60 level as the market moves into the grey hour, Topside offers light through to the 113.00 areas with the market dominated probably by orders left in the market for the Bank holiday, a push through the level will likely see the market struggling through to the 113.50 areas with limited stops along the way and stronger offers then appearing into the 113.80 level. Downside bids into the 112.20 level likely to slow a move lower however, if the market can push through the 112.00 areas the 111.85 final bids are likely to come under pressure as the market moves to break lower triggering stops on a move through to the 111.50 areas and congestive bids from then on.
• AUD: Some light profit taking as the market opening around the 0.7830 areas saw the market ease back to run along the 0.7810 areas into the grey hour, limited movement around the Chinese numbers saw the market more focused on home loan risks. Topside offers into the 0.7840 areas with an old trend line appearing in the area, a push through the 0.7850 areas is likely to see some stops appearing however, offers are likely to increase on a move towards the 79 cent level and the RBA are likely to be quick to try and curb the rise. Downside bids light through to the 77 cent areas where the market is likely to start seeing some stronger bids appearing, and then with congestion from then on there would have to be some serious commentary to see it moving quickly.

Overnight News

NZD:

NZ services activity steady in June after May rebound Survey

KRW:

1. Korea proposes military talks with N. Korea on July 21

CNY:

China Q2 GDP growth likely to cool as Beijing targets property, debt risks

EUR:

Greece heading for bond market test within days

AUD:

Australia moves to dial down financial stability risks in home loads

Today’s data

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

GBP       Rightmove House Prices M/M Jul A 0.10% | P -0.40%

CNY        Retail Sales Y/Y Jun A 11.00% | C 10.60% | P 10.70%

CNY        Fixed Assets Ex Rural YTD Y/Y Jun A 8.60% | C 8.50% | P 8.60%

CNY        Industrial Production Y/Y Jun A 7.60% | C 6.50% | P 6.50%

CNY        GDP Y/Y Q2 A 6.90% | C 6.80% | P 6.90%

09:00     EUR        Eurozone CPI M/M Jun C 0.00% | P -0.10%

09:00     EUR        Eurozone CPI Y/Y Jun (F) C 1.30% | P 1.40%

09:00     EUR        Eurozone CPI – Core Y/Y Jun (F) C 1.10% | P 1.10%

12:30     CAD       International Securities Transactions (CAD) May C 9.78B | P 10.60B

12:30     USD       Empire State Manufacturing Jul C 15 | P 19.8

Weekend News

GBP/EUR:

Gibraltar will not be a victim of Brexit Chief Minister of Gibraltar

TRY/EUR:

Defiant Erdogan attacks EU, backs restoring death penalty

EUR/ILS:

Macron shares Israel’s concerns about Lebanon’s Hezbollah

USD/CNY:

US-China trade talks sputtering at 100 day deadline

EUR:

ECB considers special assessment of Deutsche Bank shareholders

CNY:

China’s PBoC told by Xi to play bigger role in managing financial risk

Harry Hindsight

• EUR: A slow rise through the Asian session with the market initially trading around the 1.1400 levels before rising to the 1.1410 areas into the grey hour having traded towards the 1.1390 in early Tokyo, the market then ranged quietly through early London before rising quickly on the sickly looking US numbers with CPI figures looking to upset the Feds interest rate plans, Euro’s pushed quickly through the 1.1450 areas and stalled on the attempt at the 1.1470 areas before ranging through choppily to the London close between 1.1440-60, the end of London saw a slow rise to push through the 1.1470 level lightly before holding quietly to the close.
• GBP: Cable rose slowly from the 1.2940 opening lows into the grey hour testing through the 1.2960 level, the move into London saw very little interest in the market moving through to the NYK session creeping up to the 1.2980 levels, the release of the US data and the poor inflationary numbers saw the market rise quickly to the 1.3000 level and then struggle through the area as a two way battle ensued however, push through it did eventually and rose quickly from the 1.3020 areas to trigger weak stops on the move through the 1.3050 level and stall around the 1.3090 areas, the market held through to the close in London around the 1.3080 areas and only late in the session did the market slowly push through the 1.3100 level and hold into the close.
• JPY: The move through the Asian session saw early buying into the Tokyo session taking the market through to the high 113.50’s before drifting back to hold 113.40 into the grey hour, early London were sellers and the market slipped back through the opening level to trade for a few hours around the 113.20 level quietly, the move into the NYK session saw the market drifting into the numbers with USDJPY closing slowly on the 113.00 areas, the release of the numbers saw the market drop quickly triggering weak stops on the move lower and hitting the 112.50 level quickly before slipping through to the 112.30 level, the market held this level before slowly rising back through the 112.50 areas testing to the 112.70 areas with a lack of conviction before drifting back through the balance of the session to hold the 112.50 level into the close.
• AUD: A slow grind through the Asian session with the market pushing through to close to the 0.7750 areas, early London broke the level however, it was unable to capitalize on the push and held around the 0.7760 areas through to the NYK session, as with everything else a weaker USD after the numbers saw the Oz quickly rise through the 0.7775 resistance level and test to the 0.7820 areas before running into further offers and stalling at the 0.7830 area, the market drifted a little from that point testing back to 78 cent on light profit taking before running slowly to the close again pushing that 0.7830 area.

Yesterday’s premiership results

NZD       Business Manufacturing Index Jun A 56.2 | P 58.5 | R 58.2

JPY         Industrial Production M/M May (F) A -3.60% | C -3.30% | P -3.30%

EUR        Eurozone Trade Balance (EUR) May A 19.7B | C 20.3B | P 19.6B | R 18.6B

USD       CPI M/M Jun A 0.00% | C 0.10% | P -0.10%

USD       CPI Y/Y Jun A 1.60% | C 1.70% | P 1.90%

USD       CPI Core M/M Jun A 0.10% | C 0.20% | P 0.10%

USD       CPI Core Y/Y Jun A 1.70% | C 1.70% | P 1.70%

USD       Advance Retail Sales Jun A -0.20% | C 0.20% | P -0.30% | R -0.10%

USD       Retail Sales Less Autos Jun A -0.20% | C 0.20% | P -0.30%

USD       Industrial Production Jun A 0.40% | C 0.30% | P 0.00% | R 0.10%

USD       Capacity Utilization Jun A 76.60% | C 76.80% | P 76.60% | R 76.40%

USD       U. of Michigan Confidence Jul (P) A 93.1 | C 95 | P 95.1

USD       Business Inventories May A 0.30% | C 0.30% | P -0.20%

Stay lucky

Andy

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